Asia FX dithers as dollar steadies before Powell speech; yen muted after CPI data
Investing.com -- Australia’s unemployment rate fell to 4.2% in July from 4.3% in June, slightly below the Reserve Bank of Australia’s (RBA) forecast of 4.3% for the second quarter as a whole.
Employment increased by 24,500 positions last month, aligning with analyst expectations.
The participation rate remained steady at 67%, following a downward revision of the June figure from 67.1%. The labor force expanded by 14,400 individuals.
Other indicators suggested a marginally tighter labor market in July. The underemployment rate decreased to 5.9% from 6.0%, while the underutilization rate dropped to 10.1% from 10.3%.
Hours worked per employee increased slightly, though they remain below their peak from late 2024.
Despite July’s employment gains, the three-month average job growth stood at just 7,500 positions, an 18-month low.
Annual employment growth continued to slow from 2% in June to 1.8% in July, putting it on track to fall short of the RBA’s third-quarter forecast of 2%.
The latest labor market data will likely support the RBA’s decision to maintain current interest rates at its September meeting.
However, Capital Economics predicts the central bank will resume its easing cycle in November if the labor market loosens in coming months while economic activity and inflation remain subdued.
Capital Economics forecasts a terminal interest rate of 2.85%, below the analyst consensus of 3.1%.
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